Lawmakers weigh eligibility changes for popular college scholarship programs; questions loom over future funding

Nestled into Gov. Steve Sisolak’s proclamation calling state lawmakers into a special session dealing with a $1.2 billion budget shortfall was a line item decidedly not cuts-related: changing eligibility for the popular Millennium Scholarship program.

Members of the state Senate took a break from budget discussions on Friday morning to discuss and flesh out that proposal — now in the form of SB2 — which Nevada System of Higher Education (NSHE) leaders say will prevent more than 2,200 students from losing their scholarship eligibility.

NSHE deputy chancellor Crystal Abba told lawmakers via video conference that the system expected the bill to benefit about 12 percent of scholarship recipients from the spring 2020 semester whose grade point average fell below normal GPA requirements. While NSHE has not done a complete look at individual cases, Abba said the higher education system did not want to punish students who faced massive social and financial disruption during the still ongoing COVID-19 pandemic.

“As each student faced a variety of challenges that may have impacted their eligibility, the waiver option that will effectively hold students harmless for Spring 2020 is a reasonable step that will allow NSHE to quickly process eligibility updates as they are requested, without delay, for those students who want to move forward in the fall and receive their Millenium Scholarship,” she said.

The bill, SB2, authorizes the Board of Regents to adopt changes to eligibility for the scholarship program and doesn’t list any specific changes to eligibility to the program.

Although the regents would need to adopt regulations first (likely at their Aug. 7 meeting), Abba said the system’s initial proposal would require students to fill out an online form at some point through the rest of the calendar year indicating that they had been negatively affected by the pandemic and thus hold harmless their per-semester eligibility for the program.

As the scholarship system is currently set up, college students need to achieve a minimum 2.75 GPA every semester (after completing 30 college credits) to continue receiving the scholarship. If they fall below the requirement for two semesters, they’re automatically booted from the program.

But lawmakers expressed some skepticism regarding requiring students to actively fill out a form to receive the waiver, saying it would be better for the system to just issue a blanket waiver for the 2,200 affected students rather than run the risk of excluding an affected student who did not fill out the waiver.

“If there is evidence to suggest that these students were affected negatively, then I don't see a reason why you want to necessarily push them into filling out a form,” Republican Sen. Keith Pickard said. “My fear is that the one person who is trying to find work or something, and they missed it, now they lose that eligibility simply because they didn't see the notice.”

The bill would not come without a cost; Abba estimated that at the high-end, it would be between $2.1 to $2.6 million dollars, but that would vary depending on what institutions the affected students attend and when they apply for the scholarship.

That could be a problem given that part of Sisolak’s proposal to fill the state’s budget gap is to transfer $2 million from the scholarship fund’s reserve account.

Lawmakers were previously told that as it stands, the scholarship fund should have enough dollars left in it to make it through the end of the fiscal year, and that it can tap into other state funds to make up any shortfalls. 

But the scholarship fund will be empty at the end of the fiscal year, again raising the question of how lawmakers plan to find a permanent funding source for the highly popular student aide program outside of annual appropriations.

The program is funded through a combination of money in the state’s unclaimed property fund, general budget fund dollars and the state’s share of the Tobacco Master Settlement Agreement from the late ‘90s — the original funding source for the program.

State Treasurer Zach Conine, whose office oversees the program, has previously said funding for the scholarship program was “fundamentally insolvent” and proposed an ultimately unsuccessful bill in the 2019 Legislature that would have created a permanent endowment fund.

Conine said on Friday that lawmakers will have to face those funding questions for the program in the regular 2021 legislative session. Although it may come with a substantial price tag — Conine’s office estimated it may see up to a $72 million shortfall by 2023 — Abba said it was worth keeping around if possible.

“It is very challenging financially to sustain this program,” she said. “However, in terms of the state-supported financial aid programs, because of its longevity, it is the one I think that most parents and students throughout the state are aware of, so it is certainly an asset to the system and asset to the state overall.”